When the fund market is bad, most funds are unbearable, and some investors will want to redeem the stop loss in time. So will a large number of fund redemptions lead to a big drop? What happens if the fund is redeemed on a large scale? I have prepared relevant contents for your reference.

When the large-scale decline of the fund is serious, investors may flee collectively, resulting in a large number of fund redemptions. Generally speaking, according to regulatory requirements, funds generally do not operate in Man Cang. In order to cope with the "strategic space" for investors to redeem, fund managers usually have 70% to 90% of actual positions, and funds will also have a certain cash reserve to pay for redemption applications, which will not have a great impact.

However, if the amount of redemption is so large, such as "huge redemption", the fund's cash reserve is not enough to cover the redemption cost, then the fund manager will be forced to sell shares to meet the redemption demand, and the fund manager will sell a large number of shares, which will lead to a decline in the stock price; The decline in the stock price will lead to a decline in the net value of the fund; If the net value of the fund falls and investors start to redeem it, it will fall into a vicious circle and there is the possibility of a big drop.

However, there are also abnormal situations. For example, due to the increase in the net value of funds, there will be corresponding fees for fund redemption, and a large amount of fees will be deducted for large redemption. According to the provisions of the fund contract, part of the fund redemption fee will be merged into the fund assets, resulting in an increase in the net value, and then the fund will rise.

When buying a fund, the first thing to consider is your own affordability. If the loss reaches a certain level and it is unable to take risks, it needs to be redeemed in time.